ECUADOR: EFFECTS OF DOLLARIZATION ON THE COUNTRY'S ECONOMY

Abstract

In 2000, Ecuador abandoned the sucre, the national currency, and switched to the US dollar as a payment system. The dollarization of the economy laid the foundation for new forms of economic, monetary, social, cultural policy and contributed to the emergence of new rules for international economic relations with the rest of the world. The dollarization adopted by Ecuador took place in a critical state of affairs in the national economy, and the main reason for this step was the loss of confidence in the national currency as a result of uncontrolled devaluation and lack of confidence in the monetary authority, which at that time was the Central Bank of Ecuador. This article analyzes the advantages and disadvantages of dollarization for the economy of Ecuador. The materials for the study were the statistical data of macroeconomic variables: GDP, inflation, foreign direct investment. The paper also examines the impact of dollarization on international economic relations. According to these data, the growth of the dollarized economy of Ecuador after overcoming the crisis of 2000 was characterized by ups and downs. The author concludes that the national economy is still far from sustainable growth.